Professional Documents
Culture Documents
IN GENERAL
• The New Civil Code, Articles 1507-1520, the Warehouse Receipts Act or Act
No. 2137, and the General Bonded Warehouse Act or Act No. 3893.
• Act 2137 or the Warehouse Receipts Law prescribes the mutual rights and
duties of a warehouseman, who issues warehouse receipts, and his depositor,
and covers all warehouses, whether bonded or not.
• Act 3893, as amended, or the General Bonded Warehouse Law regulates and
supervises warehouses which put up a bond.
• Documents of title under the Civil Cod refer to other receipts of documents
issued in bailment contracts other than warehouse receipts.
1. Bill of lading
2. Warehouse receipt
3. Dock warrant
Bill of lading
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DOCUMENT OF TITLE TO GOODS
consignee may be the same person or different persons as stated in the bill
of lading.
Warehouse receipt
Quedan
Dock warrant
• A dock warrant is a warrant given by the dock owner to the owner of the
goods imported and warehoused on the dock upon the faith of the bill of
landing, as a recognition of the latter’s title t the goods.
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DOCUMENT OF TITLE TO GOODS
IN GENERAL
Warehouse receipt
Warehouseman
5. Storage charge
CLASSES OF RECEIPTS
Classes of receipts
• The said holder may treat, as his option, such receipt as imposing upon the
warehouseman the same liabilities he would have incurred had the receipt
been negotiable.
1. Duty to delivery the goods upon demand made by the holder of the receipt or
by the depositor.
3. To keep the goods separate from the goods of other depositors, except in the
case of fungible goods
To whom to deliver
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DOCUMENT OF TITLE TO GOODS
• In case three persons claim the right to the possession of certain goods in his
warehouse, the warehouseman may do the following:
What is the liability of the warehouseman for the care of the goods
stored?
• He is liable for any loss or injury to the goods caused by his future to exercise
such care in regard to them as a reasonably careful owner of similar goods
shall exercise. But he shall not be liable in the absence of an agreement to
the contrary for any loss or injury to the goods which could not have been
avoided by the exercise of such care or due diligence.
• While the goods are in the possession of a warehouseman, unless the receipt
be first surrendered to the warehouseman or its negotiation enjoined, the
warehouseman shall in no case be compelled to deliver the actual possession
of the goods until the receipt is surrendered to him or impounded by the
court.
Warehouseman’s liens
1. Against all goods, whenever deposited, belonging to the person who is liable
as a debtor for the claims in regard to which the lien is asserted; and
2. Against all goods belonging to another which have been deposited at any
time by the person who is liable as a debtor for the claims in regard to which
the lien is asserted if such person had been so entrusted with the possession
of the goods that a pledge of the same by him at the time of the deposit to
one who took the goods in good faith and for value would have been valid.
• The lien may be enforced by sale at auction of the goods, upon proper notice
and publication, in such quantities sufficient to pay the lien.
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DOCUMENT OF TITLE TO GOODS
When negotiable
How negotiated
1. By delivery
2. By indorsement
Negotiation by delivery
Negotiation by indorsement
• Where the goods are made deliverable to the order of a specified person, the
latter may negotiate by indorsement, and his indorsement may be to bearer,
in blank, or to a specified person or his order.
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DOCUMENT OF TITLE TO GOODS
1. Such title to the goods as the person negotiating the receipt to him has had
ability to convey to a purchaser in good faith for value, and also such title to
the goods as the depositor or person to whose order the goods were to be
delivered by the terms of the receipt has had ability to convey to a purchaser
in good faith for value; and
4. That he has a right to transfer title to the goods, and that the goods
are merchantable.
• The indorser, by negotiating the receipt, is not liable for any failure on the
part of the warehouseman or prior indorsers to fulfill their respective
obligations.
• No. He has not a guarantor. The indorsement of a receipt shall not make the
indorser liable for any future on the part of the warehouseman or previous
indorsers of the receipt to fulfill their respect obligations. [Section 45,
Warehouse Receipts Act]
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DOCUMENT OF TITLE TO GOODS
• The pledge of a warehouse receipt and its indorsement to the pledgee does
not transfer ownership of the deposit to the pledgee. Thus, whether the
cause of the loss is accidental or not, because ownership remains with him,
the pledgor bears the loss.
Does negotiation of receipt defeat the lien of the vendor of the goods
covered thereby?
• Yes. Where a negotiable receipt has been issued for goods, no vendor’s lien
or right of stoppage in transitu shall defeat the rights of any purchaser for
value in good faith to who such receipt has been negotiated, whether such
negotiation be prior or subsequent to the notification to the warehouseman
who issued such receipt of the vendor’s claim to a lien or right of stoppage in
transitu. Nor shall the warehouseman be oblige to deliver or justified in
delivering the goods to an unpaid seller unless the receipt is first surrendered
for cancellation. [Section 49, Warehouse Receipts Act]
• Such right of the unpaid seller is defeated by the indorsement of the receipt
in favor of a person who pays value therefor in good faith.
How transferred
1. Such person acquires thereby as against the transferor the title of the goods
subject to the terms of any agreement with the transferor.
2. If the receipt is non-negotiable, such person also acquires the right to notify
the warehouseman of the transfer to him of such receipt and thereby to
acquire the direct obligation of the warehouseman to hold possession of the
goods for him according to the terms of the receipt.
• The transferee acquires the right against the transferor to compel him to
indorse the receipt unless a contrary intention concerning the transfer
appears. The negotiation shall take effect as of the time when the
indorsement is actually made.
Several tests
Goods should be given to the holder who has the capacity to comply with the
requirements of Section 8 of the Warehouse Receipts Act, namely: indorse and
deliver the receipt of which he is the holder, pay the fees or liens of the
warehouseman, and sign a receipt for the delivery of the goods.
Unpaid seller may get back the goods if the warehouse receipt is still with the
buyer. However, if the receipt has already been indorsed and delivered to a holder
who paid value therefor in good faith, the latter has a better right over the unpaid
seller.
In this case, warehouseman should not deliver the goods to either of the two
as the title of ownership over the goods is in question which requires judicial
authority to determine and decide. It is not for the warehouseman to do so.
Otherwise, he will be taking the risk of being liable twice for the same goods.
Since the title or ownership over the goods is in question or is disputed, the
safe course of action for the warehouseman is to file a complaint in interpleader in
order to compel both claimants to litigate against each other for the goods.
Purpose
1. Deposit with option to the warehouseman to return the stocks or to pay the
price
2. Contract to mill
3. Contract to co-mingle with stocks of others and return the same quantity or
pay their value
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